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Organizational Relational Viability

Abstract

In the organizational design concept, feasibility proves highly relevant since it reveals the conservation strategies of an organization. Understanding these strategies allows us to assess where emphasis must be placed to generate value. This makes it possible to anticipate the breakdowns and productivity areas that the organization will address in its evolution. This chapter introduces the reader to Organizational Relational Viability as a theoretical framework for evaluation and organizational design.

Introduction

Due to the acceleration of change, we are entering into a qualitatively different world which is difficult to understand and assimilate. We are witnessing the birth of the network society (flat, transversal, dynamic structures) extremely different from the traditional “pyramid society” handed down from Roman times. The network society is characterized by agility, flexibility, ubiquity, malleability and creativity. Likewise, the new way to create value means putting knowledge into circuit.

Complexity demands the development of attitudes and competences around knowledge sharing and development, motivating people to synchronize in a responsible managerial culture based on dialogue. Failure to do so will accelerate entropy. Agility, flexibility, ubiquity, malleability and creativity all help create the efficiency required of 21st century enterprises, without which they are highly unlikely to be able to reinvent themselves.

Companies capable of internalizing and managing viability mechanisms will lead change in productive models in the new economy. These companies flatly structured, organized around process and relationships, high in coherence and congruity, will define and shape the paradigm of the company of the 21st century. These changes require us to think of new ways to approach organizations as systems, not in the input/output model, but as relational. If we have gone from such rigid forms as hierarchies to plastic forms, such as networks of collaboration, then we must imagine that these accrue to different strategies of information and communication.

If we understand a company as a team of people who interact and manage processes for the production of goods and services, then the profitability of what they produce is a function of the quality of their relations and coordination. Failing to do so has a cost, visible or invisible, and diminishes the profits of the organization. If we define an organization as an organized network of relationships, its viability and profitability will depend on two strategic areas:

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Tenability, that is, the ability to put together a quality of relationships and environment that allow people to collaborate in such a way that successful or profitable decisions are possible.

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Sustainability, that is, the quality with which processes are managed (efficient resource management) within and without the company over the course of time.

A viable and profitable relational organization rests on a business model that has solved both tenability and sustainability; in this chapter we want to introduce the reader to the theory of viable relational systems as a new way to explain how 21st century organizations must organize themselves.

Current thinking styles, largely determined by the sense of closeness and immediacy to any event ‒ regardless of their geographic location, type or size‒, have become permeated, paradoxically, by the idea of complexity and uncertainty. We have slowly started to understand the impossibility of explaining these ideas based on the classical forms which are essentially mechanistic and linear. Even as we are aware of the need to overcome the classical view, we are still far from being able to accept uncertainty and complexity as a condition of human organization. This is not a motive for premature despair since science in some way or another, touched by this kind of ideas, has begun to recover a forgotten observer, and art as well has begun to be subsumed in the aesthetics of the multiverse, as an inter-subjective fractal form of narrative. For this reason, starting from this paradoxical and silent paradigm shift, organizations have begun to address ways of management which cannot be “measured” the way it is is done classically. Today, there emerge unquestionably and decisively a set of actors that always lurked in the shadow of accountability, deleted and ignored in the economy: they, sons of a certain Zeus ‒which is knowledge‒, are the intangibles.

We now know that the source of wealth is specifically human: knowledge. If we apply knowledge to tasks that we already know how to do, we call it productivity. If we apply knowledge to tasks that are new and different, we call innovation. Only knowledge allows us to achieve these two objectives. - Peter F. Drucker (1992)